India has issued operational guidelines for its ₹84,084-crore Samudra Manthan National Offshore Exploration Scheme, establishing how government funding will support deepwater oil and gas exploration, offshore seismic mapping and shared production infrastructure. Announced on October 23, 2026, the rules are designed to make expensive offshore exploration more attractive to energy companies while helping India expand its domestic hydrocarbon resources.
The programme will run through FY2030–31, with FY2026–27 designated as a preparatory year and Phase I spending scheduled from FY2027–28 to FY2030–31. Under the guidelines, the government will support 56 exploratory wells and four stratigraphic wells, subject to separate eligibility and funding limits. The broader scheme also includes offshore data acquisition, common infrastructure for commercialising discoveries and manufacturing facilities intended to strengthen India’s domestic oil and gas industry.
Key Takeaways
- Total outlay: ₹84,084 crore for the Samudra Manthan offshore exploration programme.
- Exploratory drilling: Government support of up to 50% of eligible costs, capped at ₹675 crore per well, for 56 exploratory wells.
- Stratigraphic wells: Up to 100% of eligible costs, capped at ₹1,350 crore per well, for four wells restricted to state-owned companies or qualifying state-led consortia.
- Infrastructure: Funding will support shared offshore facilities and oil and gas manufacturing and services zones.
- Eligibility: Drilling assistance is restricted to qualifying blocks under the Revenue Sharing Contract regime, subject to the guidelines.
- Long-term objective: Expand domestic oil and gas production and reduce dependence on imported hydrocarbons.
What Is the Samudra Manthan Scheme?
Samudra Manthan, formally called the National Offshore Exploration Scheme, is a government programme intended to accelerate oil and gas exploration in India’s offshore basins. The Union Cabinet approved the ₹84,084-crore scheme on July 31, 2026.
Offshore exploration involves identifying potential hydrocarbon deposits beneath the seabed and drilling wells to determine whether oil or gas is present in commercially recoverable quantities. Deepwater and ultra-deepwater projects are especially expensive because they require specialised drilling vessels, subsea equipment, advanced geological data and complex offshore operations.
The government’s guidelines seek to reduce some of the financial risks that discourage companies from exploring these areas. The programme also aims to improve the information available to exploration companies and develop shared infrastructure that could help discoveries reach commercial production.
According to the Ministry of Petroleum and Natural Gas, India aims to add more than 600 million metric tonnes of oil equivalent to its hydrocarbon reserves through the broader initiative. This is a policy target, not a confirmed discovery of new reserves.
How the Government Will Share Deepwater Drilling Costs
The guidelines establish different funding limits for exploratory wells and stratigraphic wells. These distinctions matter because the two types of drilling serve different purposes.
Exploratory wells test whether a potential oil or gas accumulation exists. Stratigraphic wells primarily investigate underground rock layers and geological structures, helping scientists understand a basin’s resource potential.
| Well category | Number of wells | Government support | Maximum support per well |
|---|---|---|---|
| Exploratory wells | 56 | Up to 50% of actual eligible costs | ₹675 crore |
| Stratigraphic wells | 4 | Up to 100% of eligible costs | ₹1,350 crore |
For exploratory wells, the government will not automatically cover half of every project’s total expenditure. Assistance is limited to 50% of eligible actual costs and the ₹675-crore ceiling, with other conditions applying under the guidelines.
The four stratigraphic wells have a different eligibility framework. Only state-owned companies or qualifying consortia led by them can seek support for this category.
At the maximum permitted funding levels, the two categories could account for ₹43,200 crore in government assistance. This is a ceiling-based calculation, not a guarantee that the entire amount will be spent. Actual disbursements will depend on eligible costs, approvals and implementation.
When Will Companies Receive the Funding?
The guidelines connect payments to drilling milestones rather than providing all the approved assistance upfront.
For eligible wells, operators will receive 40% of the approved support after drilling reaches 40% of the sanctioned depth. The remaining 60% becomes payable after the well is completed and its report is approved.
This structure links public funding to measurable progress. It also means companies must finance parts of their operations themselves and comply with the scheme’s conditions before receiving the full support.
The rules contain additional restrictions. Development wells are not eligible for this assistance, and the government will not automatically raise the subsidy if drilling costs exceed approved limits. Operators that fail to meet work commitments may lose eligibility or face penalties, depending on the applicable provisions.
The scheme is therefore intended to share a defined portion of exploration risk rather than guarantee that private companies will recover every rupee invested.
Which Companies and Projects Qualify?
The drilling support is restricted to blocks awarded under the Revenue Sharing Contract regime. Production Sharing Contract blocks and coal-bed methane blocks are excluded unless the government specifies otherwise.
This restriction is important because the scheme does not provide an unrestricted subsidy for all oil and gas projects operating in India. Companies must meet the relevant contractual, technical and programme requirements.
The distinction between exploration and development is also significant. Exploration spending seeks to establish whether a resource exists; development spending generally builds the infrastructure needed to produce a resource that has already been discovered. The new funding provisions target the former rather than providing automatic assistance for routine production projects.
The guidelines also provide for recovery of government support after a successful project begins producing commercially. Recovery starts after seven years of commercial production or when the operator has recovered 50% of its exploration and development costs, whichever occurs first. The recovered amount will not be adjusted for inflation.
This mechanism is intended to provide financial relief during the high-risk exploration phase while allowing the government to recoup support when projects become commercially successful.
Beyond Drilling: Seismic Surveys and Shared Infrastructure
Samudra Manthan extends beyond direct drilling subsidies. The government has allocated funding across several components of the offshore exploration value chain.
| Component | Announced outlay |
|---|---|
| Offshore seismic data acquisition and processing | ₹28,534 crore |
| Offshore exploration acceleration | ₹43,200 crore |
| Common offshore infrastructure | ₹10,000 crore |
| Oil and gas manufacturing and services zones | ₹2,000 crore |
| Monitoring and support activities | ₹350 crore |
| Total | ₹84,084 crore |
Seismic surveys use sound waves to map underground rock formations. Better geological information can help companies identify promising drilling locations and avoid some unnecessary exploration expenditure. The programme includes 2D and 3D seismic surveys, reprocessing existing data and applying AI tools to support interpretation.
The infrastructure component addresses another challenge: a discovery may remain commercially undeveloped if connecting it to processing facilities or transportation networks is too expensive. Shared subsea equipment, pipelines, central processing platforms and floating production facilities could help multiple discoveries use common infrastructure.
The guidelines initially identify the Mahanadi basin for shared-infrastructure support, with a smaller provision for Kutch. Proposals will be assessed through the prescribed government approval process.
The programme also provides for oil and gas manufacturing and services zones with common utilities, testing and certification facilities. These are intended to strengthen domestic supply chains for equipment and services used in offshore operations.
What the Scheme Means for India’s Energy Security
India imports a substantial share of the crude oil it consumes, exposing its energy costs to international prices, supply disruptions and geopolitical developments. Increasing domestic production could reduce some of this exposure, although the extent of any benefit will depend on future discoveries and their commercial viability.
The government has said Samudra Manthan could help raise domestic oil and gas production from approximately 62 million metric tonnes of oil equivalent annually to 80 million tonnes. It has also projected the potential for additional production to reduce annual crude oil imports by nearly ₹1 lakh crore.
These figures are conditional projections rather than guaranteed outcomes. Offshore exploration is uncertain, and identifying a deposit does not automatically mean it can be produced economically. The government itself notes that moving from an exploration-block award to commercial production typically takes five to 10 years.
The scheme’s success will therefore depend on the quality of geological data, drilling results, the cost of developing discoveries and the availability of infrastructure.
The Bigger Picture
The operational guidelines mark a move from approving a large offshore exploration programme to defining how public money will be disbursed and recovered. By combining drilling assistance with geological surveys and shared infrastructure, the government is attempting to address several barriers that can prevent offshore resources from being explored or commercialised.
The policy also introduces a clearer division of risk: companies remain responsible for costs beyond support limits and must meet eligibility conditions, while the government assumes part of the financial burden for specified activities. Whether this approach attracts sustained investment will become clearer as qualifying projects begin drilling and producing results.
FAQs
1. What is the ₹84,084-crore Samudra Manthan scheme?
It is India’s National Offshore Exploration Scheme, approved to accelerate offshore oil and gas exploration, improve seismic data, support deepwater drilling and develop shared production infrastructure through FY2030–31.
2. How much drilling cost will the government cover?
For 56 exploratory wells, assistance can cover up to 50% of eligible actual costs, capped at ₹675 crore per well. Four stratigraphic wells can receive up to 100% of eligible costs, capped at ₹1,350 crore per well, subject to stricter eligibility conditions.
3. Will private oil companies be eligible?
Private companies may qualify for exploratory-well support if they meet the scheme’s requirements, including the applicable Revenue Sharing Contract block conditions. The four stratigraphic wells are restricted to state-owned companies or qualifying state-led consortia.
4. When will the scheme be implemented?
FY2026–27 is the preparatory year, while Phase I spending is scheduled from FY2027–28 through FY2030–31.
5. Will the scheme immediately reduce India’s oil imports?
No. Exploration and development take time, and not every well discovers commercially recoverable oil or gas. Any reduction in imports will depend on successful discoveries, production capacity and the economics of bringing resources to market.
Looking Ahead
The immediate test for Samudra Manthan will be how quickly the government approves eligible projects, completes preparatory work and converts the funding framework into drilling activity. Progress in seismic mapping, well completion and shared infrastructure development will help show whether the programme is improving the economics of offshore exploration.
Over the longer term, successful discoveries could strengthen India’s domestic energy supply and support local equipment manufacturing and offshore services. But the scheme’s final impact will depend on geological outcomes and commercial execution, not just the size of the approved budget. The government will need to balance public investment, accountability and environmental safeguards as the programme advances.
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